NET GEARING	%

In computing ratios, which also includes balance-sheet items, Verbund eliminates, in agreement with the auditors, the effects from cross-border leasing transactions, since this involves closed items on the asset and liabilities side of the balance sheet. Under application of IAS 27 (revised 2003), minority shares were allocated to shareholders’ equity and the previous year’s figures were adjusted.

Return on capital employed (ROCE), the return on interest-bearing capital, deteriorated slightly from 10.0 % to 9.7 %. This deterioration can be attributed to the decline in the operating result. The average capital employed remained practically unchanged.

Net Gearing, the ratio of interest-bearing borrowings to shareholders' equity, dropped from 223.8 % to 160.5 %. This significant reduction was mainly due to the ongoing debt-clearing program and the increase in shareholders’ equity from retained earnings. This year, the value for net gearing lay below the average value of the European suppliers for the first time since deregulation.

The EBIT margin fell from 16.0 % to 13.0 %. This was triggered, above all, by the drop in grid revenue as well as by the additional, result-neutral sales revenue from the processing and administering of subsidies for eco-electricity.